‘Heightened anxiety’: McDonald’s CEO says the K-shaped economy may be getting worse — and his menu proves it. Here's why

At the same time, affluent Americans continue to have "very resilient spending" — demonstrating the deepening economic divide in the U.S.

A K-shaped economy describes uneven economic growth, where the affluent (the upper prong of the 'K') see their wealth increase, while lower-income earners (the lower prong of the 'K') face increasing financial strain.

Inflationary pressures and elevated gas prices are "going to disproportionately impact low-income consumers," said Kempczinski (2). "And so we expect the pressures there are going to continue."

What exactly is a K-shaped economy?

While wealth inequality isn't new, the rise of the K-shaped economy is credited to the uneven recovery and rampant inflation of the COVID-19 pandemic (3). It continues now, with a war in Iran, an oil blockade, lingering inflation, skyrocketing gas and electricity costs, stagnant wages and hiring freezes.

The K-shaped economy helps explain why consumer spending is strong, yet consumer sentiment is weak (4). And why some stocks are hitting record highs, yet middle-class and low-income Americans alike are struggling to pay the bills.

In part, spending is being propped up by the affluent, who've seen their stock portfolios soar in value while their homes continue to appreciate.

As of Q4 2025, the top 10% of U.S. households held over two-thirds of the nation's wealth. Of that, the top 0.1% held 14.5%, according to Federal Reserve data (5). At the same time, the top 10% account for nearly half (49.2%) of all consumer spending, according to Moody's Analysis (6) of Fed data.

"The well-to-do, they're doing great and they're out spending," Mark Zandi, chief economist at Moody's Analytics, told NPR. "Folks in the bottom and middle of the income distribution, not so much" (7).

U.S. inflation jumped to 3.8% in April, according to the U.S. Bureau of Labor Statistics (8) — largely driven by soaring energy costs related to the war in Iran and an oil blockade in the Strait of Hormuz.

That translates into consumer prices rising 0.6% on a monthly basis, with the energy index increasing 17.9% and the food index increasing 3.2% over the previous 12 months.

So it's not surprising that many Americans are changing the way they spend — at least those on the lower prong of the 'K.'

McDonald's, for its part, is trying to cater to both prongs of the 'K.' While it's offering a lower-priced McValue menu, including $3 menu items, it's also introduced "premium" products, like the new Big Arch burger that costs between $7.50 and $13 (depending on the location (9)).

How to navigate the K-shaped economy

More than a quarter (28%) of Americans expect their financial situation to get worse this year, according to a YouGov survey (10).

Of those who expect it to get worse, many plan to cope by reducing their spending — from dining out (66%) and vacations (46%), to everyday conveniences like coffee and taxis (48%). On the flip side, nearly a quarter (24%) of those who expect their finances to improve don't plan on cutting back in any area.

These findings "highlight a consumer environment in which financial expectations are playing a central role in shaping both restraint and selective spending," according to the survey.

While trimming the fat can help to offset inflation, it's just one strategy that Americans on the lower prong of the 'K' can use to strengthen their financial position.

For example, you may want to look for ways to boost your income, such as working extra hours or upskilling for a higher-paid position. You might also have opportunities to earn passive income, such as renting out a room in your house.

If you don't have an emergency fund, consider building one as soon as possible (a good rule of thumb is to have enough set aside to cover at least three to six months of expenses). Consider diverting any extra cash (like a tax refund or a bonus) into this fund and make sure it's easily accessible if you need it, such as in a high-yield savings account.